StockerYale gets new Nasdaq warning

Published: November 29, 2005

The Nasdaq has again warned Salem-based StockerYale Inc. that it may delist the firm’s stock from the exchange unless its share price rises above $1.
The company announced Nov. 25 that it received notice from the exchange the previous Monday, Nov. 21. This is the second time the company has been warned since last April, when its stock started trading below $1. But the stock price lifted above the $1 mark for most of September, earning the company a letter that it was in compliance with Nasdaq rules. The revival, however, was short-lived, and it has not traded for more than $1 since.
StockerYale CFO Fred Pilon noted that the company had six months to comply with Nasdaq, and he doubted that the company would institute a reverse split, a move other companies with low share prices have used to comply with an exchange’s standards on stock price.
"It’s not likely," Pillon said. "We are not likely to be delisted for quite a while."
The Salem-based fiberoptics company has been struggling since April 2004, when the company touted a lucrative defense contract as newly won, even though it was part of an existing contract.
The SEC complained that CEO Mark Blodgett and his father Lawrence Blodgett used insider information to time a lucrative stock sell-off. The Blodgetts settled with the SEC, but the company itself is fighting an ongoing shareholder lawsuit over the charges.
The company also announced that some shareholders could accelerate their ability to exercise their options to buy stock at the end of the year for more than $3 a share. There are more than 1.5 million shares (half owned by company officials and board members) that can be bought with such options, with an average exercise price at $9.37. It is unlikely that anyone will take advantage of the offer, with the stock trading at such a low level, Pilon said. But by allowing them to accelerate it, it will reduce the company’s compensation expense under the new accounting rules, which go into effect next year, he said. - BOB SANDERS

This article appears in the November 25 2005 issue of New Hampshire Business Review